Qantas reports strong financial performance for financial 2017

Qantas has reported an underlying profit before tax of $1,401 million and a statutory profit before tax of $1,181 million for the 12 months ended June 30th, 2017.

The underlying result represents the second highest performance in Qantas’ 97 year history, down 8.6 per cent compared with last year’s record.

It is slightly above the guidance range provided in early May this year, mainly due to strengthening of the group’s domestic businesses.

A drop in statutory profit before tax of $243 million reflects that the financial 2016 result included the gain on sale from the Sydney Domestic Terminal.

Overall, the financial 2017 performance shows the Qantas Group’s margin advantage over local and global competitors, which has been underpinned by completion of its three year transformation program.

In the domestic market, Qantas and Jetstar combined reached a record $865 million underlying EBIT, making them again the two most profitable airlines in Australia with around 90 per cent of the total domestic profit pool.

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Qantas International, which has faced high levels of capacity growth in the broader market, saw an improvement of conditions in the second half; it posted an Underlying EBIT of $327 million.

Continued strength in its core markets helped the Jetstar Group deliver the second highest profit in its 13 years of operation.

Qantas Loyalty booked a record $369 million Underlying EBIT on a four per cent increase in revenue as it continued to diversify its earnings.

The group met all the objectives of its financial framework, reporting a 12-month return on invested capital of 20.1 per cent.

Another $470 million in transformation benefits were delivered, completing the three year program and outperforming the $2 billion target by $125 million.

The Qantas Transformation Program has underpinned these results and enabled the Group to outperform its key domestic and international competitors.

This performance means Qantas is able to reward shareholders, recognise the hard work of its people and invest for customers.

Alan Joyce, chief executive of Qantas, said the result marked completion of a turnaround plan that has repositioned Qantas as one of the most profitable airline groups in the world.

“Three years ago, we started an ambitious turnaround program to make the Qantas Group strong and profitable.

“We tackled some difficult structural issues, became a lot more efficient and kept improving customer service.

“Today’s announcements show this plan has well-and-truly paid off. It’s delivered $3.5 billion in cumulative underlying profit, record customer satisfaction and the opportunity for Qantas to grow.

“We operate in a very competitive environment, so continuous improvement is crucial.

“Being more efficient is part of our culture and we’re now targeting an average of $400 million in gross benefits a year.

“We have a plan to keep delivering sustainable returns well into the future.

“We’re investing in lounges, Wi-Fi and cabin upgrades; looking at new aircraft to evolve our network; and diversifying into new businesses like insurance and financial services.

“Our people remain central to our success, and that is why it is so pleasing that we are able to grant another bonus to around 25,000 non-executive employees to mark the successful completion of the turnaround program,” added Joyce.